BUSINESS

Jackpotjoy’s revenue growth undone by higher interest costs

TAGs: intertain group, jackpotjoy

jackpot-joy-revenue-growth-interest-costsUK-listed online gambling and bingo operator Jackpotjoy Group reported double-digit revenue gains in the first quarter of 2017 thanks to solid customer growth across its brands.

Jackpotjoy, until recently known as the Intertain Group, reported revenue of £71.4m in the three months ending March 31, 11% higher than the same period last year. While adjusted earnings nudged up £1.2m to £29.3m, the company booked a net loss of £15.3m for the quarter due to rising interest costs on its significant debt load (£407m at the end of Q1).

The company’s flagship Jackpotjoy brand, which accounted for 71% of group revenue, reported revenue up 14% to £50.7m thanks to “significant” growth in its Starspins and Botemania brands, which helped offset declines in its social gaming operations.

The Vera&John online casino brand saw revenue rise 13% to £15.7m, representing 22% of group revenue. The Mandalay bingo brand reported a 14% revenue decline to £5m, which the company blamed on changes to its promotional spending and an unfortunate comparison with Mandalay’s record quarterly performance in Q1 2016.

Across all brands, average active customer ranks grew 15% while monthly revenue per customer inched up 2% to £87.

The company said Q2 has started on the right foot, with the Jackpotjoy segment delivering “robust” growth, Vera&John enjoying “very strong” trading and Mandalay rebounding from its Q1 decline to post record revenue in the month of April.

Jackpotjoy CEO Andrew McIver celebrated the company’s first earnings report under its new moniker and new listing on the London Stock Exchange. McIver said the company remained convinced that it could grow” in line with the market” this year but warned that profit growth was likely to slow when the UK follows through on its vow to begin taxing free bets. This change was expected to take effect in August, although it could be delayed a few months due to the UK’s upcoming general election.

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